The company’s EBITDA for 2017 reached PLN 7.6 billion, which is 4% higher than in the preceding year. EBITDA adjusted for one-off items was PLN 6.5 billion, up by 5% from the previous year. This results from a higher lignite-based production volume, positive impact of newly-acquired assets and higher returns on distribution.

The Conventional Generation segment (including PGE Energia Ciepła) made the largest contribution to PGE Group’s EBITDA in 2017, bringing in almost PLN 4.1 billion. The Distribution segment closed the reporting period with over PLN 2.3 billion in EBITDA. The Supply segment generated PLN 811 million and the Renewables segment PLN 364 million.

2017 was a period of intensive investment work and preparations for the announcement and implementation of our district heating strategy but above all it was marked by the impressive acquisition of EDF’s Polish assets, today operating as PGE Energia Ciepła – said Henryk Baranowski, CEO of PGE Polska Grupa Energetyczna.

By forming a new business line focusing on district heating activities, we symbolically initiated the process of transforming PGE Group. We are getting close to 2020, which is when our business strategy ends and a time to decide on the strategic growth options indicated ahead of us. Our analyses show that the low-emission scenario is the most likely from among the available choices. The changing surroundings, both regulatory and technological, justify implementation of an approx. 1000 MW offshore wind projects half way through the next decade – added Henryk Baranowski.

As far as low-emission technologies are concerned, PGE Group intends to also invest in new gas-fired generation capacities at Dolna Odra power plant. Preliminary results of a feasibility study are optimistic enough to consider a project with double the capacity initially planned, which would mean the construction of two new 500 MW gas-fired units. The Group should have detailed results of the study by mid-2018. Further to that, it is analysing a project to build another 500 MW gas unit at one of PGE’s existing locations.

Responding to the challenges of today’s energy industry, growing client expectations and an increasingly restrictive climate policy, we have taken the path of energy and thermal security both at the national level and at the local level in cities. We are a financially strong company that is implementing essential investments. Our involvement in modernisation of the Polish energy industry is a sign of our care for the quality of air and our responsible approach to using the natural resources available in our country – said Henryk Baranowski.

In 2017, the Group’s energy output reached 56.79 TWh, of which 39.05 TWh was lignite-based. This is the effect of lower downtime for unit repairs and modernisations at Bełchatów power plant, return to service of units 2, 3 and 6 after “medium” repairs and return of unit 10 after modernisation in the base period.

Hard coal-based energy production reached 12.35 TWh, up by 9% y/y. This is related to the acquisition of PGE Energia Ciepła assets. The merger also positively influenced gas-fired production volume, which increased by 23% to 2.87 TWh. This result was also due to a new gas-and-steam unit at the CHP plant in Gorzów being commissioned at the beginning of 2017.

Wind-based generation went up by 19% y/y to 1.28 TWh on the back of favourable weather conditions. Electricity distribution volume reached 35.34 TWh in 2017.

With the acquisition of eight CHP plants in the largest agglomerations such as the Tri-City area, Wrocław and Kraków, located in five voivodships, as well as a power plant in Rybnik in the Silesia region and nearly 400 km of district heating networks in four cities, PGE Group reinforced its leading position on the Polish electricity market and became the largest supplier of ecological district heating.

PGE Group is continuing to implement its key growth projects. Investment expenditures in 2017 reached PLN 6.8 billion and were 17% lower than in the preceding year. Work progress on the construction of two units at Opole power plant with total capacity of 1800 MW was at approx. 90%.

The content of an annex to containing new deadlines for delivery of the new units – based on a schedule proposed by the General Contractor – and addressing the issue of responsibility for delays is currently being negotiated. PGE’s partner in these discussions is the investment’s General Contractor, i.e. all consortium members: Polimex-Mostostal, Mostostal Warszawa and Rafako along with GE Power, which is formally the consortium leader.

The construction of a 490 MW unit in Turów is also progressing. The assembly of a turboset was commenced and work on ancillary systems, including a flue gas desulphurisation unit with a gypsum tank, is under way. Overall progress at the construction site is approx. 50%.

PGE is continuing its wide-ranging cooperation with startups. PGE Ventures, a corporate venture capital fund set up by PGE Group to invest in the new technologies area, commenced in September a far-reaching scouting programme, which received submissions from nearly 150 startups looking to work with PGE. The fund signed investment agreements with two of them, and three other agreements are being finalised. In the next stage, PGE Ventures intends to expand its investment portfolio by adding at least another eight equity investments and extend the reach of its second scouting programme in search for innovative startups to other Central and Eastern European countries.

We are working on solidifying PGE’s positive image. A company that is aware of the on-going changes and the challenges ahead. We want to be a company that is modern, innovative and highly responsive to changes in our surroundings, while respecting the natural environment. Our activities in the coming years will be directed at this. We want to shape a responsible energy industry of tomorrow in our country – said Henryk Baranowski.

2017 was also a period in which PGE Group intensely worked on clean air initiatives. One outcome of these activities was the introduction at the beginning of 2018 of an anti-smog tariff to PGE’s offering, which features up to 65% savings. This is an element of a wide-reaching project to combat air pollution. In December 2017, PGE Group unveiled its District Heating Strategy, which defines its mission in this area based on stimulating the transformation and development of the country’s district heating segment and thus contributing to improvements in the quality of the environment, competitiveness of the economy, level of social wellbeing and energy security at both local and national level.


Consolidated financial statements of PGE Capital Group for 2017